When you are shut out from mainstream banking and are in desperate need for cash, you can find financial relief through title loans. Title loans are short-term loans that require a collateral. In this case, the collateral you can use to take out such loans is any title of ownership. Some lenders may only accept car ownership while others may accept real estate property titles.
The good thing about title loans is that most lenders offering these loans don’t check your credit score. If you are unable to obtain bank loans for people with bad credit and you are in dire need for extra cash, title loans can be your best solution. Another good thing about title loans is that because the lender has a form of guarantee from you, the approval rating for these loans is high. And because there is collateral presented against the loan, most lenders are more confident to offer a bigger amount of money even if you do not have a borrowing history with them.
Applying for Loans
Another good news, you can apply for title loans online. All you need to do is visit your lender’s website and send your application. In most cases, you will be required to fill out an application form and send a soft copy of the requirements via email through a secured server.
Repaying Your Title Loans
Since title loans are meant only for emergency purposes, then it is to be expected that the maximum amount will be capped to a thousand, at most. Given that, try to apply only for the amount that you really need. Otherwise, you’ll end up completely ruining your budget the moment payment comes due.
Like most loans, you have several repayment options. You may pay for the title loans in full or via installment. If you can’t make a payment, it is best that you advise your lender in advance so appropriate adjustments can be made.
Since title loans are short term loans, the interest rate is only good for the time of the contract, which is usually about 30days. Hence, the interest rate would look higher compared to long-term loans that last for a year or two.
What Happens When You are Unable to Pay Back Your Title Loans?
The obvious answer is that your car or any property that you pledged as collateral will be repossessed. However, there are some companies that would agree to extend your due date granted that you discuss your predicament with them. If you won’t communicate, chances for automatic repossession will be high.
The root of all negative feedback for title loans is that many lenders that offer these loans only accept vehicle ownerships. That is why you need to weigh the pros and cons before you submit an application for such loans.
If you really need the money fast, then you have to consider commuting to work or carpooling until you have paid the loan back and you’re driving your car again.